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in La Puente, CA
La Puente investors face a choice: DSCR loans for long-term rentals or hard money for quick flips and rehabs. Both skip tax returns and W-2s, but they serve completely different strategies.
DSCR loans work for buy-and-hold investors who want stable financing. Hard money fits fix-and-flip projects that need fast cash and short timelines.
DSCR loans qualify you based on rental income, not your W-2. If the property generates enough rent to cover the mortgage payment, you can get approved without showing tax returns.
You get 30-year fixed terms with rates typically 1-2% above conventional loans. Lenders want 20-25% down and a DSCR ratio above 1.0, meaning rent covers the full mortgage payment.
This works for La Puente investors building rental portfolios. You can finance multiple properties without maxing out your debt-to-income ratio since your personal income doesn't factor in.
Hard money lenders fund based on the property's after-repair value, not your income or credit. You can close in 7-14 days, which beats traditional financing by weeks.
Expect rates between 8-15% with 12-24 month terms. Most lenders want 10-20% down plus money for rehab costs held in escrow until work is complete.
La Puente flippers use hard money to grab distressed properties fast. The high cost only makes sense if you're selling or refinancing within a year.
DSCR loans cost less but take 30-45 days to close. Hard money costs more but closes in under two weeks. Rate difference is huge: DSCR around 7-8%, hard money at 10-15%.
DSCR requires the property to cash flow from day one. Hard money doesn't care about current condition since they're lending against future value after you fix it up.
You hold DSCR loans for years as permanent financing. Hard money is bridge financing you pay off fast through a sale or refinance into conventional or DSCR.
Pick DSCR if you're buying a rental property in La Puente that's already rent-ready or needs minor work. The lower rate saves you thousands monthly on a property you'll hold for years.
Choose hard money when you're buying a distressed property off-market or at auction. Speed matters more than cost when you're competing with cash buyers or need to start rehab immediately.
Some investors use both: hard money to acquire and renovate, then refinance into a DSCR loan once the property is rented and stabilized.
Neither loan requires personal income verification. DSCR looks at rental income only, hard money looks at property value only.
DSCR costs less in rate and fees. Hard money costs more but you pay it for a shorter time, so total interest depends on your timeline.
DSCR typically wants 640+ credit. Hard money cares less about credit, some lenders approve with scores in the 500s.
DSCR maxes at 80% loan-to-value with strong credit and cash flow. Hard money rarely exceeds 80% and usually requires rehab reserves.
Hard money closes in 7-14 days. DSCR takes 30-45 days because it requires appraisals and full underwriting.
Yes, if you're keeping the property as a rental. You'll drop your rate by 3-7% and extend to a 30-year term.